Barclays 2008 Annual Report Download - page 217

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Financial statements
Barclays PLC Annual Report 2008 215
12 Trading portfolio
2008 2007
£m £m
Trading portfolio assets
Treasury and other eligible bills 4,544 2,094
Debt securities 148,686 152,778
Equity securities 30,535 36,307
Traded loans 1,070 1,780
Commodities 802 732
Trading portfolio assets 185,637 193,691
Trading portfolio liabilities
Treasury and other eligible bills (79) (486)
Debt securities (44,309) (50,506)
Equity securities (14,919) (13,702)
Commodities (167) (708)
Trading portfolio liabilities (59,474) (65,402)
13 Financial assets designated at fair value
Heldon own account
2008 2007
£m £m
Loans and advances 30,187 23,491
Debt securities 8,628 24,217
Equity securities 6,496 5,376
Other financial assets 9,231 3,545
Financial assets designated at fair value – heldon own account 54,542 56,629
The maximum exposure to credit risk on loans and advances designated at fair value at 31st December 2008 was £30,187m (2007: £23,491m).
The amount by which related credit derivatives and similar instruments mitigate the exposure to credit risk at 31st December was £2,084m (2007:
£2,605m).
The net loss attributable to changes in credit risk for loans and advances designated at fair value was £2,550m in 2008 (2007: £401m). The gains on
related credit derivatives was £519m for the year (2007: £4m loss).
The cumulative net loss attributable to changes in credit risk for loans and advances designated at fair value since initial recognition is £2,149m at
31st December 2008 (2007: £401m). The cumulative change in fair value of related credit derivatives at 31st December 2008 is £523m (2007: £4m).
Held in respect of linkedliabilities to customers under investment contracts/liabilities arising from investment contracts
2008 2007
£m £m
Financial assets designated at fair value held in respect of linked liabilities to customers under investment contracts 66,657 90,851
Cash and bank balances within the portfolio 2,526 1,788
Assets held in respect of linkedliabilities to customers under investment contracts 69,183 92,639
Liabilities to customers under investment contracts (69,183) (92,639)
A portion of the Group’s fund management business takes the legal form of investment contracts, under which legal title to the underlying investment
is held by the Group, but the inherent risks and rewards in the investments are borne by the investors. In the normal course of business, the Group’s
financial interest in such investments is restricted to fees for investment management services.
Due to the nature of these contracts, the carrying value of the assets is always the same as the value of the liabilities and any change in the value of the
assets results in an equal but opposite change in the value of the amounts due to the policyholders.
The Group is therefore not exposed to the financial risks – market risk, credit risk and liquidity risk – inherent in the investments and they are omitted from
the disclosures on financial risks in Notes 47 to 49.
In the balance sheet, the assets are included as ‘Financial assets designated at fair value – held in respect of linked liabilities to customers under
investment contracts’. Cash balances within the portfolio have been included in the Group’s cash balances. The associated obligation to deliver the value
of the investments to customers at their fair value on balance sheet date is included as ‘Liabilities to customers under investment contracts’.
The increase/decrease in the value arising from the return on the investments and the corresponding increase/decrease in linked liabilities to customers is
included in the Other income note in Note 6.